Posts Tagged ‘Healthcare’

D-Day For Obamacare Means Big Changes For Healthcare

Tuesday, May 27th, 2014

MOBs are getting ready to take center stage as healthcare moves into more of a localized, outpatient setting.

By John Driscoll, President, Alter+Care

The first of this year was to be Obamacare’s D-Day. Though some changes kicked in earlier — the right to keep kids on your health plan until they turn 26, for example — the big provisions like the individual mandate became law this year. The ramifications from a medical and economic standpoint have been written about amply. In regards to the healthcare real estate industry, there are two very large trends: the consolidation of providers and the move to outpatient as the new center of healthcare delivery.

Part of the Obamacare plan to improve outcomes is the concept of the Accountable Care Organization. ACOs are essentially consortiums promoted as bigger, better models that manage health at the population level across a broader swathe of the healthcare specialties.  An ACO might include a hospital, various specialty groups, a  surgery center, imaging, emergency department and even nursing homes, with all payments made to the head of the ACO – usually the hospital – and then distributed to the rest of the group.

It’s now all about the team. As a result, the ACO has caused the biggest wave of consolidation I’ve ever seen in the sector. Consider that a quarter of specialty physicians and 40 percent of primary care physicians are already employed by hospitals. This number is up from 5 percent and 20 percent, respectively, in 2000. Some larger specialty practices are combatting this trend by merging with other practices to avoid being purchased by healthcare systems or hospitals.

Some independent practices are moving out of condominium office buildings and joining together to acquire office buildings. The costs of maintaining small independent space can become burdensome, especially as the technological pressures on integration and connectivity are imposed. Chances are, information technology financing will become an ever-increasing part of medical office loan commitments. Some IT expenditures are in the $30,000 to $50,000 range, while multi-specialty groups have larger expenditures to fund.

In order to lower costs and operate more efficiently, hospitals have migrated services from expensive acute-care environments to technologically enabled outpatient facilities. The hospital-centric model of the past has already given way to a hub-and-spoke network in most markets, where outpatient centers provide convenient and accessible care to patients and refer volumes to affiliated inpatient facilities. So what’s next? As it develops, hub and spoke will become a distributed model of care. It will result in providers who are physically dispersed, yet highly integrated through technology. Electronic medical records and advances in medical information technology will allow discrete providers to operate as a team. Primary care doctors will act as gatekeepers, coordinating and overseeing care regimens across this broad network.

The presence of this “patient-centered medical home” model means large MOBs (rather than hospitals) will become the hubs, while smaller specialty sites have become the spokes.  Think of the last time you visited a hospital for a procedure as opposed to a medical office building located in your community. Some systems are even leasing space in retail malls. As a result, the MOB is the definitive center not only of care, but also of healthcare real estate.

Last year was a banner year for outpatient services, and the investment community jockeyed to scoop up prized MOBs. There was a total of $4.98 billion-worth of MOB sales through the third quarter of 2013. This is compared to MOB sales of $5.21 billion for all of 2012. This has resulted in an average sales price of $231 per square foot, which is very strong with cap rates in the 6 percent range. If you extend the numbers out to sales of all buildings leased by healthcare providers, including doctors’ offices, urgent care clinics, diagnostic labs, imaging centers, the total reached $6.67 billion last year.  This was the second-highest number we’ve experienced in 13 years with a sales price of $270 per square foot. When you consider that 90 percent of the $1 trillion of healthcare property overall is still owned by hospitals, it is certain we are only at the beginning of this shift toward third-party real estate ownership.

To meet the challenges of distributed care and cost reduction, developers and operators of healthcare assets will need to think about the particular mix of services and programming in every building. This will result in the consolidation of redundant and inefficient facilities, while in other cases it will mean extending into preventive health and wellness to achieve population health management goals.

This article first appeared in Western Real Estate Business.

Baby Boomers Worry About Their Health, Memory Loss

Monday, July 25th, 2011

Baby boomers are more concerned with the ways that aging impacts their physical and mental health than the role it plays in their appearance.  Fully 65 percent of baby boomers – who are currently between the ages of 47 and 65 — expressed concern with their health, with 26 percent focused on retaining their mental faculties.  Just eight percent mentioned appearance as their biggest aging concern.

Boomers also are slightly less active than the previous generation.  Just 57 percent started a regular exercise program in 2010.  Of those who exercise regularly, 35 percent are walkers.  Nearly 4.3 million adults 50 or older used illicit drugs in the last year, according to a report from the federal Substance Abuse and Mental Health Services Administration.  According to the agency, substance abuse in this age group could create public health challenges over the next decade.

Boomers are in less agreement about whether their longer lives will be better than the previous generation: 49 percent expect a better life than their parents, while another 25 percent believe it will be about the same.  Another 26 percent expect that the quality of their lives will be worse than their parents.

Although younger adults believe that 60 is the start of old age, Baby Boomers strongly disagree.  The median age they cite is 70.  Twenty-five percent of Boomers insist you’re not old until you’re 80.  “In my 20s, I would have thought the 60s were bad, but they’re not so bad at all,” said Lynn Brown, 64, a retired legal assistant and grandmother of 11 living near Phoenix.  Boomers – 77 million strong — are celebrating their 47th through 65th birthdays in 2011.  In general, they are more optimistic about their futures than past generations.  Americans born in the population boom that followed World War II are more likely to be energized about the positive aspects of aging, such as retirement, than worried about the negatives, such as poor health.

The findings that midlifers who are worried about aging are focused more on their health over physical looks may seem surprising to some — but then when you see stunning boomer role models like Susan Sarandon and Helen Mirren, it all makes sense,” said Cindy Pearlman, entertainment writer for the Chicago Sun Times and best-selling author of “The Black Book of Hollywood Beauty Secrets” series, and regular contributor to’s Style channel.  “Even in a town like Hollywood, where you’d expect nips and tucks everywhere you turn, many celebrities are saying that the secret to looking great at any age is accepting the inevitable changes that the years bring, while staying in shape and embracing your own sense of style.”

Many baby boomers have no problem working till they’re 65 or 70 as long as they’re not doing heavy lifting. A majority are enthusiastic about aging and have less concerns about physical ailments than their parents’ generation.  Tom Beumont understands that the current status of Social Security will require him to work longer, but he is fine with that.  “We kind of learned from our parents…we have a more diverse background and we also exercise more so that’s more important to us”, Beumont said.

Cindy Black, a nurse, said a lot of the people she sees at a clinic work too much. “I think we are burning the candle at both ends. They went to bed earlier back then and drank more water,” Black said.  Black said that while baby boomers exercise more than their parents and drink and smoke less, their fast paced lifestyle has a price.  According to Black, Boomers might end up working themselves to death, literally.  “They laugh when I tell them this but they need to go to bed by 10 o’clock.”

Baby Boomers are also concerned about their independence. Boomers primarily worry about losing their independence because of illness, while 44 percent are concerned about experiencing memory loss.  Approximately 41 percent have concerns about remaining financially self-sufficient.  The hedonistic Boomer generation forever changed the social scene with the dawning age of the flower child, and the explosion of the sexual revolution during the 1960s and 1970s.

Just 18 percent of Boomers worry about dying, while another 22 percent are moderately concerned about it.  More than two-thirds expect to live to at least age 76, and one in six expects to live into their 90s.

Living In a Flight Path Can Be Hazardous to Your Health

Monday, November 22nd, 2010

Too much noise pollution from jet planes can impact heart health.Noise pollution from airplanes flying low over residential areas may be unhealthy for the heart.  This is the finding of a study of 4.9 million adults in Switzerland, which determined that death by heart attack was more widespread among people who lived under noisy flight paths.  “The effect was especially evident for people who were exposed to really high levels of noise, and was dependent on how long those people had lived in the noisy place,” said Matthias Egger, a University of Bern researcher.

Although this isn’t the first time that noise pollution from planes has been linked to cardiovascular risk, the new study could determine if other factors – such as air quality – are a contributing factor.  “It’s been a problem when you look at road traffic noise, there are both high levels of noise and high levels of air pollution,” Egger said.  “By looking at airports, we were in a position to disentangle these effects.”  Egger and his research team identified 15,532 deaths from heart attacks among 4.6 million Swiss residents between late 2000 and the end of 2005 with detailed information from a mortality study called the Swiss National Cohort.

The research team studied government records and environmental data to determine how close people lived to airports and highways, as well as how much particulate matter was in the air in these areas.  As a result, the researchers identified how much aircraft noise and air pollution each person experienced over 15 years.  Factoring in such elements as exposure to air pollution, education and income, the researchers determined that the level and duration of airplane noise increased the risk of suffering a heart attack.  “Noise probably does have effects on health and it is important that we gain a better understanding of these,” Egger concluded, noting that additional research is needed.

Older Americans Tend to Be Sicker than Britons – Until Their 70th Birthdays

Wednesday, November 17th, 2010

Americans are sicker than Britons until they are 70.  Older Americans tend to be sicker than their British counterparts.  Once they celebrate their 70th birthdays, however, Americans can expect to live longer.  This is one finding in a study conducted by RAND Corporation, the California-based research institute. American longevity could be due to their country’s expensive healthcare system, said James P. Smith, a Rand economist and demographics expert.  “We actually get something from it,” Smith said.  “We are sicker than the English and we have to spend a lot.”  Apparently, all those expensive tests “diagnosing chronic illnesses early, and how aggressive we treat those things” make the difference.

Healthcare spending in the United States ate up $2.3 trillion in 2008 – comprising 16 percent of the total economy.  By contrast, British healthcare spending was just 8.7 percent of that nation’s significantly smaller GDP.  According to James Banks, an economist at the Institute for Fiscal Studies in London, mortality rates for cancer and stroke are higher in Britain than in continental Europe.  Healthcare spending in Europe is “a few percentage points higher” than in Britain.  Healthcare rationing is another issue.  “There is more rationing in the U.K. than there is here,” said Dr. Peter A. Meunnig, a health policy expert at Columbia University’s Mailman School of Public Health.

According to Banks’ study, Americans in their 70s were twice as likely to have cancer and diabetes as their British counterparts.  Americans were also more apt to have high blood pressure, heart disease, heart attacks, strokes and chronic lung disease.  In both countries, the groups studied were older, white and had insurance coverage.  Banks believes that more healthcare is “focused on the elderly” in the United States than in England, although this may be changing.  “The (British) government in recent years has been targeting cancer, heart disease and stroke,” he said.

It’s Time to Shed Light on Healthcare Spending

Tuesday, November 16th, 2010

As much as 40 percent of American healthcare spending brings no benefit.  The healthcare system in the United States significantly under performs every other industrialized nation, with the result that too many Americans either die or are harmed every year.  This is the opinion of Louise Probst, Executive Director of the St. Louis Area Business Health Coalition.  Writing for the Commonwealth Fund, Probst says that “Since the Institute of Medicine’s (IOM) executive summary to its landmark report To Err is Human was published in the Journal of the American Medical Association, the IOM estimate that up to 30 percent of all healthcare expenditures pay for care with little or no health benefit fails to shock.  Experts now predict that 40 percent or more of all spending has little or no benefit.  Meanwhile, the average cost of health insurance for a family of four has grown to more than $14,000 annually.”  The Commonwealth Fund promotes a high-performing healthcare system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable — low-income people, the uninsured, minority Americans, young children and the elderly.

According to Probst, “High healthcare costs create significant suffering for American families, businesses and governments.  Other leading nations spend half of what we do on healthcare, making it increasingly difficult for families to retain their standard of living and for American businesses to compete in a global economy.”  Each and every American pays the nation’s healthcare tab indirectly through smaller paychecks, higher taxes and health benefit costs hidden in the price of non-healthcare goods.  Compounding the situation is the fact that the jobs that the nation needs to make up for these costs are being outsourced to nations where healthcare is cheaper.  “The outcome is soberly clear:  In 2009, one of even seven Americans lived in poverty and 50 million Americans were uninsured, according to the U.S. Census,” Probst said.

Why is it that healthcare consumers know so little about spending and the waste associated with it?  Probst says that “Despite consistent calls for price and quality transparency from the business community since the ‘buy-right’ movement of the early 1980s, the IOM’s call for action more than a decade ago, and the sustained effort of many labor and consumer groups, our nation has yet to achieve meaningful transparency.  As long as price differences remain opaque to patients and their physicians, there is little hope for improving the affordability and efficiency of American healthcare.”

Healthcare Leaders Prefer Standardized Payments

Thursday, November 11th, 2010

71 percent of healthcare leaders support standardized payment system.  It seems as if the only way to control rising healthcare costs is to create a standardized payment structure.  This is the primary finding of the 22nd Commonwealth Fund/Modern Healthcare Opinion Leaders survey, which studied disclosure and pricing in the healthcare industry.  More than two-thirds of the 190 individuals who responded to the survey – fully 71 percent – said it is “very important” or “important” that “all payers use the same basic method of payment for rewarding quality and efficiency.”

Just 12 percent of survey respondents don’t believe that a standardized payment structure will impact the quality and efficiency of healthcare.  All groups of survey respondents strongly supported the perception of a common payment structure for private insurers.  Fully 72 percent of respondents representing academia and research institutes voiced support for the concept, compared with 79 percent from healthcare delivery organizations, as well as 77 percent form insurers and other health businesses.  A total of 54 percent favor the concept.

Commenting on the study, Louise Probst, Executive Director of the St. Louis Area Business Health Coalition, saidWe all know the drill. The American healthcare system seriously underperforms when compared with the health systems of every other industrialized nation.  As a result, each year, large numbers of Americans are harmed or die unnecessarily.  In fact, since the Institute of Medicine’s (IOM) executive summary to its landmark report To Err Is Human was published in the Journal of American Medical Association in September 1999, additional research has only confirmed its findings.  A decade later, the IOM estimate that up to 30 percent of all healthcare expenditures pay for care with little or no health benefit fails to shock. Experts now project that 40 percent or more of all spending has little or no benefit.  Meanwhile, the average cost of health insurance for a family of four has grown to more than $14,000 annually.”

Spending Big Bucks Doesn’t Equal Better Healthcare

Tuesday, November 9th, 2010

There’s no correlation between health plans’ spending and the quality of care their members receive.  The National Committee for Quality Assurance (NCQA) reports that there is no correlation between the amount health plans spend and the quality of care their members receive. In their annual State of Health Care Quality report, which crunched data from 1,000 health plans insuring 118 million Americans, researchers analyzed spending on the five most costly diseases (diabetes, hypertension and asthma) and found significant variations among the plans.  The biggest spenders don’t always deliver the best care.

Margaret O’Kane, NCQA president, said the study found no clear relation between resource utilization and quality.  She believes that the results point to a need to create a system that spends less and delivers higher quality care.  Additional findings are increases in colorectal cancer screening rates and the ongoing use of beta blockers after heart attacks.  There is room for improvement in the overuse of imaging and antibiotics, as well as helping Medicare patients avoid falling.

In one interesting finding, the researchers learned that vaccination rates for children with private plans fell by nearly four percent over the previous year.  By contrast, vaccination rates rose for children covered by Medicaid in 2009.  One possibility is a popular misconception that links vaccines to autism (blame Oprah partly for this) and has driven some parents away from evidence-based recommendations.  Additionally, there’s been a drop in patient satisfaction with their health plans and physicians.  For example, while 64 percent of members with Medicare plans said they usually or always get the care they need, just 53 percent of respondents with commercial plans felt the same.  This represented a drop from a high of 80 percent in 2005.

Uninsured Americans Total 9.4 Percent of the Population in 2009

Wednesday, October 6th, 2010

The number of Americans with no health insurance climbed in 2009, along with a rising poverty rate.As Congress debated healthcare reform, the number of Americans who lack healthcare insurance climbed approximately 9.4 percent to 50.7 million people in 2009.  According to U.S. Census Bureau statistics, 16.7 percent of Americans have no healthcare insurance compared with 15.4 percent — or 46.3 million people — the previous year.

During the same time period, the poverty rate in the United States rose to 14.3 percent, the highest level since 1994. The 2008 rate was just 13.2 percent.  This means that 44 million Americans – one in seven people – are living in poverty, an increase of four million over the previous year.  Children were especially hard hit, with one in five under the age 18 living in poverty, according to the Census Bureau.

“This is the highest number of uninsured since 1987, the first year that comparable uninsured data was collected,” said David Johnson, chief of the Census Bureau’s Household Economic Statistics Division.  The report includes conclusions from the 2010 Current Population Survey Annual Social and Economic Supplement.

Census Bureau statistics reveal that the number of Americans covered by private health insurance fell from 201 million to 194.5 million in 2009 compared with the previous year.  Employment-based health insurance fell from 176.3 million covered to 169.7 million.  Meanwhile, Americans with government health insurance rose to 93.2 million from 87.4 million.

Healthcare Consumption Shows Systemic Waste

Monday, September 27th, 2010

More than half of America’s 354 million annual acute-care visits – for fevers, stomach aches or coughs – typically take place in a hospital emergency room rather than in a primary-care physician’s office. This statistic was revealed in a study of systemic waste published in the journal Health Affairs. According to the study’s authors, their findings underscore a valid question about the healthcare reform law – how can a system that is already overwhelmed provide care to an additional 32 million newly insured patients?

The study, led by Dr. Stephen R. Pitts, an associate professor of emergency medicine at Emory University, examined acute-care visit records from 2001 to 2004 and found that 28 percent were to the emergency room.  This was particularly true for weekend and after-hours visits.  More than 50 percent of acute-care visits by patients who lacked health insurance were to emergency rooms, which are required by federal law to threat anyone with a serious condition.  This places a heavy financial burden on hospitals, which are compelled to provide basic care in what is admittedly an expensive environment.  Often, there is little or no follow-up to determine progress or secure follow-up care.

“More and more patients regard the emergency room as an acceptable or even proper place to go when they get sick,” according to Dr. Pitts.  “And the reality is that the E.R. is frequently the only option.  Too often, patients can’t get the care they need, when they need it, from their family doctor.”  The Affordable Care and Patient Protection Act is anticipated to boost primary care by increasing reimbursements for physicians, attracting students to the field with incentives; expanding community health facilities; and encouraging accountable-care organizations and medical homes.  “If history is any guide, things might not go as planned,” Dr. Pitts wrote.  “If primary care lags behind rising demand, patients will seek care elsewhere.”

Anthony Downs On Financial Reform

Tuesday, September 14th, 2010

Anthony Downs discusses the ins and outs of financial reform.  The nation’s financial system needs significantly more regulation than exists now.  The lack of tough regulatory powers strongly impacted the recent financial crash and the Great Recession that ensued.  The good news is that the Obama administration is moving firmly in this direction with financial reform legislation a critical item on its agenda.  This is the opinion of Anthony Downs, a senior fellow with the Brookings Institution and former President of the Real Estate Research Corporation.  In a recent interview for the Alter+Care Podcasts, Downs said that between 1980 and 2007, the value of international capital markets – including bank deposits, assets, equities, public and private debt – quadrupled relative to the world’s GDP, lifting millions of people out of poverty.  Although unprecedented, this growth relied heavily on borrowed money to finance higher living standards and highly leveraged loans with limited reserves backing them.  In the end, the growth was unable to be sustained.

The financial reform legislation currently undergoing reconciliation by a Senate-House conference committee is not a reinstatement of the 1933 Glass-Steagall Act – which separated investment and commercial banking — because banks will still be allowed to deal with securities.  Under the new law, banks will have to register derivatives with some type of formal exchange and maintain records on who is borrowing money and under what terms.  This marks a significant change from before the Great Recession, when derivatives were traded with virtually no oversight.

Downs believes that former Federal Reserve Chairman Alan Greenspan contributed to the financial crisis in two ways.  In 2001, when Greenspan was informed that there was fraud in the subprime housing market and that he should do something about it, he refused to take action because he didn’t believe in regulation.  According to Downs, “that was a terrible mistake and meant that all the horrible loans made in the subprime market could continue unchecked.”  Greenspan’s second error was to maintain low interest rates for as long as he did at a time when an enormous amount of capital was coming into the United States economy from overseas.  Because investors were avoiding the stock market, they put their money into real estate.  That drove the price of properties sky high and destroyed the concept of intelligent underwriting and evaluating the risk before approving the loan.